Sony Makes Surprise Cut To Japanese PS3 Price

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CHIBA, Japan, Sept 22 (Reuters) – Sony Corp. on Friday cut the price of its new game machine PlayStation 3 by 20 percent in Japan, in a surprise move that will attract more customers but likely widen losses in its game division.

Sony, which will launch the latest version of its blockbuster game gear on Nov. 11 in Japan, now plans to sell a version of PS3 with a 20-gigabyte (GB) hard disk drive for 49,980 yen ($430), down from the previously announced 62,790 yen ($540).

“This will drive PS3’s unit sales,” said Hirokazu Hamamura, president of Japanese game magazine publisher Enterbrain. “It is still more expensive than its rivals, but the revision has put the machine within the allowable range of game machine prices.”

Microsoft currently sells its Xbox 360 in Japan for 39,795 yen ($342) and Nintendo will be launching its Wii console on Dec. 2 for 25,000 yen ($215).

If Sony had left its previous price unchanged, game players in Japan would have nearly been able to buy both the Xbox 360 and Wii for the price of one PS3.

The decision, however, created investor doubts over the consistency of the company’s market strategy and the validity of its market research, said Masaki Iso, chief investment officer at Yasuda Asset Management.

“Sentiment might change if the product sold well as a result of this. But it is still received negatively because the company changed its mind after comparing its price with others.”

The price cut is the latest in a series of adjustments in Sony’s PS3 game plan as the nearly $30 billion video game industry heads into the critical year-end shopping season.

Sony earlier this year pushed back the overall PS3 launch from spring 2006 to November.

Then, this month, the company further delayed the European launch to March 2007 due to inadequate supply of a key component.

At the same time, Sony cut by half its PS3 shipment estimate for calendar 2006 to 2 million units, while maintaining its target to ship 6 million units by March.

The electronics maker will keep its planned prices of $499 in the United States and 499 euros in Europe for the 20-GB model.Continued…

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